Gov’t workers’ bonuses, cash gifts to be released by mid-November

MANILA, Philippines — Government employees will start to receive the last half of their yearend bonuses and cash gifts by the middle of this month, according to the Department of Budget and Management (DBM).

In a circular dated Nov. 9, Budget Secretary Florencio “Butch” Abad said the remaining half of the yearend bonus as well as the cash gift for 2015 “shall be released not earlier than Nov. 15.”

The additional cash given away this time of the year are mostly spent by Filipinos on their Christmas holiday celebrations.

The other half of the yearend bonus was already distributed last May, ahead of the start of classes for most students in June.

The yearend bonus is equivalent to one month’s worth of workers’ basic salaries, while the additional cash gift amounts P5,000.

Under the 2015 national budget, the government allotted P20.95 billion for yearend bonuses on top of P4.69 billion for cash gifts.

Both the bonus and the cash gift “shall be granted to all national government officials and employees, whether under regular, temporary, casual or contractual status, on full-time or part-time basis, who have rendered at least a total of four months of service including leaves of absence with pay from Jan. 1 to Oct. 31 of each year, and who are still in the service as of Oct. 31 of the same year,” the DBM noted.

The money that the government distributes as bonuses and cash gifts to its workers comes from the annual budget.

Government-owned and -controlled corporations as well as government financial institutions, meanwhile, source bonuses from their corporate funds.

Local government units also draw bonuses from their own funds.

The over 1.5 million workers in government—from the President down to minimum salary earners—starting next year could enjoy higher pay under a proposed bill endorsed by President Benigno Aquino III to Congress last Monday.

Under the proposed bill titled “Salary Standardization Law of 2015,” the salary of the next Philippine president would more than triple to P388,096 a month by 2019 from P120,000 per month at present.

As for the minimum basic salary or Salary Grade 1, the proposed law calls for an increase to a mere P11,068 a month by 2019 from just P9,000 per month at present.

Under the bill, salaries would be adjusted over the next four years beginning 2016. It would cost the government a total of P226 billion. Both houses of Congress have already committed to pass this bill by Dec. 19, Abad said.

Once passed into law, the initial tranche of the salary adjustment would take effect on Jan. 1, 2016, Abad said. The three succeeding tranches would be implemented every Jan. 1 of the subsequent years.

Abad said these adjustments were benchmarked with “market” rates or the pay being received by counterparts in the private sector. At present, the amounts being paid to government employees are equivalent to only 55 percent of market rates, according to the budget secretary.

The additional amounts would come from basic salary increases, a 14th-month pay to be distributed every midyear, as well as an enhanced performance-based bonus. According to the DBM, the pay hike across all salary grades averages 45 percent, equivalent to 84 percent of private sector compensation levels.

The budget secretary said these proposed adjustments were based on a study conducted by the Department of Budget and Management (DBM) in cooperation with private sector consultant Towers Watson.

The study, completed last July, was “mandated by the Joint Resolution No. 4 of Congress in 2009, which provided for a review of the compensation and position classification system after three years from the last year of the adjustment, which was Jun. 1, 2012, to determine the competitiveness of government pay in relation to the private sector and the compensation strategy to bring government pay closer to market rates,” Abad explained.

According to the DBM, “the structure of the adjustment should temper the cost of benefits, such as Government Service Insurance System premiums and PhilHealth contributions, and allow for higher take home pay, especially for those in the lower salary grades.”

Also, under the law signed by President Aquino early this year that raised the tax-exemption cap on bonuses to P82,000, the DBM noted that “majority of employees will enjoy a higher take home pay” upon the implementation of the Salary Standardization Law of 2015.

With higher salaries, the government would be able to keep its workers amid more intense competition with the private sector due to a booming economy, Abad said.  SFM